Pak's bid to position China as US alternative receives jolt following $19bn deal collapse

Beijing/New Delhi, Sept 30(ANI): A Chinese mining company has pulled out of what was to be Pakistan's largest foreign investment deal due to security concerns, complicating Islamabad's effort to position China as an alternative to the United States as its main ally.

An official at the China Kingho Group, one of China's largest private coal miners, said that it had backed out in August from a 19-billion-dollar deal in southern Sindh province because of security concerns for its personnel after recent bombings in Pakistan's major cities, The Wall Street Journal reports.

Zubair Motiwala, Chairman of the Sindh Board of Investment, acknowledged the cancellation of plans to build a coal mine, power and chemical plants over 20 years, but said he was hopeful that Kingho would reconsider, the report said.

Islamabad began playing up its friendship with Beijing after the unilateral May 2 US raid on Osama bin Laden's hideout in Pakistan sent US-Pakistan ties into a tailspin.

But China's response has been lukewarm so far, suggesting that Islamabad may remain dependent on billions of dollars in military and civilian aid from Washington for some time to come, the report added.

The Pakistan Army has been lobbying for a formal defence pact with China in the wake of the bin Laden raid, a Pakistani government official was quoted as saying.

Such a pact would draw China into any conflict involving their ally and likely anger the US and India, Pakistan's regional rival, the report said.

China has not commented on the matter, while a Pakistan military spokesman declined to comment, it added.

"The Chinese wouldn't go in for that. It's too much to put on their plate when they can't ensure how much they can control their own ally," Pakistani military analyst Aisha Siddiqa said.

China is also keen to balance its support for Pakistan with a renewed push to improve relations with India, a growing trade partner, the report said.

Beijing is also eager to avoid tensions with the US that could disrupt a first official visit to Washington early next year by Vice President Xi Jinping, who is expected to take over as Communist Party chief in 2012 and president in 2013, the report added, attributing to diplomats and analysts. (ANI)